Why It's Time to Bet on This Property Stock's Next Move Higher

An unwinding of pessimism in the options pits could boost the shares, too

Deputy Editor
May 12, 2022 at 1:50 PM
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American International Group Inc (NYSE:AIG) is down 0.8% to trade at $58.04 this afternoon. The shares hit an more than four-year high of $65.73 on April 21, but have pulled back in recent sessions alongside the broader market. In fact, American International Group stock has lost nearly 7% in the last month, and is clinging just above its year-to-date breakeven level. However, there's reason to believe this pullback will be short lived, given AIG is now trading near a historically bullish trendline.

Digging deeper, American International Group stock just pulled back to its 200-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, comparable moves have occurred five times over the past three years, with the security enjoying a positive one-month return 100% of the time, while averaging a 7% pop. A similar move from its current perch would put AIG back above the $62 level -- well within striking distance of its multi-year highs.

AIG chart May 12

An unwinding of pessimism in the options pits could create additional tailwinds for the equity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AIG's 50-day put/call volume ratio of sits higher than 96% of readings from the past year. This indicates puts have been getting picked up at much faster-than-usual clip.

 

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